AstraZeneca continues deal spree, sells off latest asset

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Dive Brief:

AstraZeneca is divesting another non-core asset in an effort to monetize neglected parts of the business and redirect resources to more important parts of its pipeline.

The British pharma is selling the global rights outside Japan to migraine drug Zomig (zolmitriptan) to Germany’s Gruenthal. This includes the U.S. rights, which previously belonged to Impax Pharmaceuticals. Impax will continue to manufacture and supply Zomig in the U.S.

Gruenthal will pay AstraZeneca $200 million upon completion of the deal and up to $102 million in future milestone payments.

Dive Insight:

For Gruenthal, Zomig adds to the company's pain management portfolio. The nasal spray, approved in 1997, had $96 million in sales outside of Japan in 2016.

For AstraZeneca, this is part of a larger restructuring that’s been going on at the big pharma for over a year now. The company had a bit of fire sale at the end of 2016, selling off a number of big and small assets.

The sales are an effort by AstraZeneca to better allocate its resources. The company has been monetizing older drugs that no longer contribute meaningfully to its goals, while refocusing its resources on more important areas of the pipeline, like its promising immuno-oncology drugs and respiratory portfolio.

CEO Pascal Soriot promised investors a couple of years ago that AstraZeneca would hit $45 billion in annual revenues by 2023. AstraZeneca is going to have to make some major changes in order to keep Soriot’s promise. Revenues were at just about half that in 2016, falling steadily since 2014.

AstraZeneca has been putting particular focus on its immuno-oncology assets, but the company is a bit late to the party. The British pharma is relying on its combo strategy to catch up to rivals like Merck & Co. and Bristol-Myers Squibb, which are currently dominating the checkpoint inhibitor market.

To that end, it has rejiggered its program for PD-L1 inhibitor Imfinzi (durvalumab) as a means of differentiating the asset and giving it a better chance at competing.